The movie opens with Brigadier General Dean Hopgood (Stephen Lang) staring intently at his wall from behind his desk. He tells his secretary that he will be going into the next room and charges into his wall, hoping to phase through it. He hits the wall hard and says shit.
More of this is true than you would believe.
Bob Wilton (Ewan McGregor) is a reporter at a local newspaper in Ann Arbor Michigan. He opens the film with a narration about how his story doesnt begin where he thought it would. He wanted it to start when he married his college sweetheart, Helen (Rebecca Mader), but he acknowledges that his story started when he interviewed a local man who he heard on talk radio claiming to be part of a secret government initiative. He meets with Gus Lacey (Stephen Root) and Lacey tells him about the psychic spy initiative and tells Bob that he killed his hamster with his mind. Lacey shows Bob a video of his hamster, staring intently at a wheel and then keeling over. Bob is wowed, despite thinking that Lacey is crazy, but then the hamster gets up. Bob asks why it isnt dead and Lacey replies that his mother didnt want him to show the hamster dying so he put in a video if it acting strangely. Lacey mentions that everyone in his unit had different methods and that the strongest Psi-warrior was a man named Lynn Cassady.
Bob writes a small piece on Lacey and forgets about him. A year later in 2003, one of Bob and Helens fat coworkers has a heart attack and dies, which serves as a catalyst for Helen leaving Bob. Helen tells Bob that life is too short to spend not looking for true happiness and leaves to be with Bobs one armed editor, Dave. Bob grows increasingly aimless, and decides that he will go to Iraq in order to get the perfect scoop.
Bob goes out to the Middle East, but he cant get into Iraq. He lounges around hotels and calls Helen to tell her about his tour in Iraq. When he realizes that shes still with Dave and not missing him, Bob hangs up and goes to get drunk in the hotel lobby. He starts doodling in a notebook and notices a man sitting at the table next to him works for a company trying to make a sales pitch to the newly appointed Iraqi government and decides to talk to him. The man (George Clooney) introduces himself as Skip, but when the power goes out and he lights up a candle, Bob sees the mans nametag says Lynn Cassady.
Bob asks Lynn if he knows Lacey, and Lynn runs away. As Lynn runs away, the power in the building fluctuates and Bob pursues him until they arrive at the kitchen. Lynn is on edge and asks Bob who sent him, but Bob tells him that hes just a reporter from Michigan looking for a story. Lynn brings Bob up to his room and tells him about the New Earth Army.
The New Earth Army was founded by Bill Django (Jeff Bridges). A Vietnam Vet, he was shot during a mission and had a vision of his attacker which told him that Love would be the winner of wars. Perplexed, Bill offered to research a different way to wage war, and the United States government founded his research. Bill returned years later, after experimenting with numerous drugs. He created a manual which established the New Earth Army as a branch of psychic warfare, supported by Brigadier General Hopgood. Hopgood had read that the Russians believed that the US was researching psychic warfare, so he suggested that the US actually start researching it to prevent the Russians from developing a way to beat them first. Lynn, who made the computers in Area 51 crash and go haywire, was transferred over to the New Earth Army unit to harness his psychic abilities and become a Jedi.
Bob is fascinated by the story and convinces Lynn to take him with him into Iraq. Lynn tells Bob that he is retired and doesnt want to have to deal with Bob, but notices Bobs doodling of an All Seeing Eye from the dollar bill and changes his mind. Lynn takes an injection of steroids for what he says is Crohns disease and Bob goes to sleep.
The next day, the duo head out into Iraq by car. They drive all day until its lost. Lynn tries to cook some hamburgers with a strange solar cooker made by the New Earth Army. Hours later, the meat is ruined and Lynn is pissed. The pair go to sleep in the car. The next morning, Bob wakes up alone in the car and flips out, thinking Lynn abandoned him to die in the dessert. However, Lynn was just on the cars roof saluting the Sun. Lynn starts driving them toward Baghdad, but as he practices his cloud bursting, crashes the car into a large stone on the side of the road.
Bob and Lynn wait for rescue and Bob learns more about the New Earth Army. The unit was not officially recognized as a branch of the military but was dedicated to invisibility, psychic remote viewing and Bill helped Lynn reach his full potential and trained his unit to be the best that they can be. Lynn went from an uptight awkward soldier to a great remote viewer; able to locate whoever he needed to, using his mind. Bob is starting to think that Lynn is insane, and his suspicions are seemingly confirmed when Lynn hurts him with an object in several different ways. After a while, a truck pulls up and picks the pair up.
The men on the truck pick up the two and immediately go through their bags. Bob asks Lynn if theyve just been picked up by terrorists and Lynn confirms it as a gun is cocked in their face. They are kept in a holding cell and Bob freaks out after Lynn tries to tell him more about the New Earth Army. Lynn explains that Bob was destined to be with him in this cell because of the drawing Bob had in his notebook of the All Seeing Eye. Lynn shows Bob his All Seeing Eye Tattoo on his chest, which calms Bob down a bit. Lynn tells him that they have been kidnapped by lower level gangsters and that they cannot allow themselves to get traded off to real terrorists.
The next morning, at the swap, Lynn refuses to move, and the standoff gets tense. The terrorists are ready to shoot when Bob screams I Am a Reporter! in Arabic. They immediately begin shooting at him, but Lynn tackles the shooter and takes him out. A third hostage runs away into the dessert and Lynn takes the terrorists gun and truck and drives away with Bob. They try to pick up the third hostage, Mahmood, but end up running him over. They are surrounded by White Jeeps, owned by a private defense contractor named Todd Nixon (Robert Patrick). He takes the three into the city, exposing his plans to bring franchises to Baghdad and westernize the region. As hes bragging, a firefight breaks out between his contractors and their rivals (both claiming to have been fired on by Iraqis). The trio escapes and heads to Mahmoods house.
At Mahmoods house, he finds that his wife is missing and no one knows where she is. Hes depressed and Lynn apologizes to him for how Nixon acted in the car, saying that not all Americans are like that. That night, Bob watches Lynn inject his last bottle of medication and Lynn pretends he doesnt notice. Mahmood lends his car to Bob and Lynn and the pair continues their journey. They drive to a crossroads and Bob ridicules the fact that Lynn doesnt know where to drive. He takes a right and their car does a backflips when a hidden mine explodes.
The pair survive and Bob is carried from the wreck by Lynn. Bob is upset that hes still chasing Lynn through the jungle and asks about Bobs mission. Bob tells him that he was reactivated by Bill. He got a message through astral projection to come to Iraq and find him. Bob realizes that Bob is truly insane and starts yelling at him. Lynn tells him that its something he needs to do because it was his fault the New Age Army was destroyed.
Lynn had excelled in remote viewing and was able to locate people at will. This pissed off Larry Hooper (Kevin Spacey), a psychic who wanted to be number one. Lynn continuously defeated Hooper in testing, so Hooper sought to use psychedelics to even the playing field. He tricked a green lieutenant into taking LSD and the lieutenant went insane from Hoopers experiments. Naked, the lieutenant went into the training yard and started firing at soldiers. Bill approaches him and asks him to surrender the gun, but the lieutenant just shoots himself in the head instead. Bill is brought before a military oversight committee and Hooper buries him by accusing him of miss using funds to hire prostitutes and buy drugs (the hooker thing is a lie!). Bill is dishonorably discharged and says goodbye to Lynn. Soon after, General Holtz (Glenn Morshower) takes over the New Earth Army and Hooper tells him that there are offensive applications to thier psychic abilities. Holtz orders Lynn to psychokinetically stop the heart of a goat. Lynn stares at the goat and it dies after a few minutes of intense staring. Lynn finished the remainder of his tour and leaves, but not before Hooper gives him the Death Tap. Ever since he used his power for evil, Lynn has been cursed.
Lynn and Bob go to sleep and when they wake up, Bob sees a goat. He follows it to water and Lynn and Bob drink it as a helicopter appears overhead. The two pass out and come to in a hospital beds. Lynn sees a man looking at them and follows him. They pass through a chamber full of goats and another full of prisoners forced to listen to Barney while being forced to watch strobe lights. They then find an older Bill, burnt out from booze and drugs, working for Hooper at Psi Securities, a psychology/psychic firm which focuses on overseas subliminal messaging. He offers Lynn a job, but Lynn is broken by seeing Bill in such bad shape.
Bob walks around and finds Lynn in bed. Lynn tells him hes dying. Bob tries to explain that the death palm is nonsense, but Lynn tells him its his cancer that is killing him. Bob is saddened for his friend and Lynn gives him an old eagle feather Bill had given him to honor his psychic abilities. Bob finds Bill, but Bill shrugs it off. He and Bob find common ground and Bob convinces him to help Lynn get out of his rut. They go into the pantry to get ice cream. Bill then teaches Bob about how to embrace the Jedi lifestyle.
Hooper pays Lynn a visit. He wakes him up on purpose, offers him a job and tells Lynn that he knows his abilities are a sham and that Lynn had gotten the location from a former New Earth Army soldier who had hinted that there was work to do. Hooper maliciously taunts Lynn, and Lynn goes back to sleep.
The next morning, Lynn goes to join Bob and Bill in the mess tent for breakfast. Bob tells him not to eat the eggs since they laced them with LCD. The entire army is high and hallucinating. Unfortunately, Bill also spiked the water, so Bob, Lynn and Bill are also high. They run to the goat and prisoner storage barns and Bob convinces Lynn to get redemption by freeing the goats. They heard the goats and prisoners out of the camp without a hitch due to the drug induced chaos around them, until they are blocked by Hooper. Hooper points a gun at them, but then puts the gun in his own mouth (mirroring his test subjects suicide). However, before he can shoot himself, he succumbs to the munchies and goes to get food instead. The prisoners and goats leave.
Bob sees Lynn and Bill get into a helicopter. He follows them and asks to come, but Lynn tells him that his job is to go and tell the world of their story. Lynn and Bill take off and vanish. Bob tells us that the official word is that they crashed in the desert (because thats what happens when you fly a helicopter while you're tripping on Acid). He wrote the story, but the public didnt even consider it. They just made a joke about the part where prisoners were tortured with Barney. Disappointed, he realized that life happens when you dont try to go against the current (something Lynn had told him personally). He becomes editor of his paper and stares at his wall. He focuses on it intently, smiles, then charges as he phases through the wall like a real Jedi.